Data capital investment strategy in competing supply chains

Baogui Xin (), Yue Liu and Lei Xie
Additional contact information
Baogui Xin: Shandong University of Science and Technology
Yue Liu: Shandong University of Science and Technology
Lei Xie: Shandong University

Annals of Operations Research, 2024, vol. 336, issue 3, No 16, 1707-1740

Abstract: Abstract Digitalization strategy can conduce to improving sustainable competitive advantage for supply chains. However, digital transformation requires relentless data capital investment (DCI), often constrained by a dilemma that imposes a stark tradeoff between investment cost and returns. A three-stage non-cooperative game of data capital-embedded competing supply chains solves this dilemma. From the game model, we find neither manufacturer invests in data capital when the DCI is costly. In contrast, both manufacturers invest in data capital when the DCI benefits are relatively significant. And an asymmetric equilibrium with one investing and the other not will be achieved when the DCI advantages and the DCI cost disadvantage match each other. Under some circumstances, a prisoner’s dilemma exists where the two manufacturers implement DCI, even though they will be better off if neither implements. Moreover, DCI in each supply chain has two spillover effects: the positive vertical spillover effect and the negative horizontal spillover effect.

Keywords: Supply chain competition; Data capital investment (DCI); Three-stage non-cooperative game; Stackelberg game (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10479-023-05334-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:336:y:2024:i:3:d:10.1007_s10479-023-05334-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-023-05334-1

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().